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Futures are a highly leveraged trading product. Margins are "good faith deposits" that a trader must maintain in order to trade a particular product. There are three different types of margins:
Initial Margin
As the highest amount required for a contract, this comes into play on the first day that an account decides to hold a position through the trading session. Meaning, if a trader buys a contract and does not want to close it out in the same session, this amount is required per contract. Initial Margin is set by the exchange (not by the FCM/broker)
Maintenance Margin
The amount set for this category is also provided by the exchange. It represents the requirement to hold a contract from the second trading day and onward.
Intraday Margin
This is the amount an account needs to trade one (1) contract. It is also the lowest of the three listed. Insofar that the product is traded within the trading hour/session, this is the amount required. Intraday margin is set by the FCM/broker and may vary between firms.
Please note that margin rates differ from one product to another. Margins are quoted as one (1) contract and are subject to change at any time.
Disclosure: This communication is sent to you by NinjaTrader, LLC, a software development company which owns and supports all proprietary technology relating to and including the NinjaTrader trading platform.
1. No. You need to know what amount is required by the brokerage for day trading. Typically, day trading margin rates would be lower than initial margin required by the exchange.
2. Day Trading Maintenance could be a little more complicated. Some firms require that your balance does not fall below a certain minimum others may have other requirements.
3. No. you need to ask the firm what specifically what they consider day trading hours. Some would quote the hours you said, while others may consider 5PM CST as a start until the next day's close.
I hope this helps.
Thank you,
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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